DGAP-News

African Energy Chamber: Energy Chamber threatens litigation against Bank of Central African States (BEAC) on Anti African FOREX regulations - Seite 2

The aspirations of governments and local companies across the CEMAC region to build a vibrant and jobs-creating energy sector have indeed been dramatically affected by the foreign exchange regulations imposed by the BEAC. Such regulations are putting extremely deterring barriers of entry for investors in Gabon, the Republic of Congo, Cameroon, CAR, Equatorial Guinea and Chad, and a bitter halt to any kind of local content development for companies and entrepreneurs in these countries.
While the end goal of the BEAC to fight corruption is noble and must be supported, in essence its regulations prevent the free flow of capital and the repatriation of profits, and deny local companies the ability to compete on equal terms with their foreign counterparts.

Because of the region's reliance on imports of equipment and material for oil & gas operations, the ability of local companies to establish strong business relationships with foreign partners is central to their competitiveness and ability to secure contracts. However, CEMAC's forex rules mean its local services companies are now unable to quickly and efficiently pay their foreign suppliers. Concretely, it would take a local services company from CEMAC several months to honour its contractual engagements with an operator, compared to only a few days or weeks for any other competitor not constrained by the same forex regulations.
As a result, companies in Central Africa are condemned to inexorably lose the contracts they have worked so hard to secure from foreign operators and contractors. In a region where oil & gas represents 80% of revenues, the consequences for economic growth and jobs creation could be catastrophic. To make things even worse, BEAC's Instruction No. 002/GR/2020 of September 2020 on currency transfers outside of the CEMAC region has set up additional taxes of 0.75% on all transfers made outside of CEMAC starting January 1^st 2021, on top of existing fees and taxes.

On behalf of the fight against corruption, the African Energy Chamber can only observe a gradual killing of investment in Central Africa, made through the punishment of local entrepreneurs. A big difference needs to urgently be made between fighting corruption and punishing hard working entrepreneurs, and it needs to be done before it is too late. The BEAC cannot love and support jobs while it hates or punishes those who create jobs.